Evergy, Inc. (NYSE:EVRG) Q3 2019 Earnings Conference Call - Final Transcript

Nov 07, 2019 • 10:00 am ET

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Evergy, Inc. (NYSE:EVRG) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Executive
Terry Bassham

targeting cumulative $110 million of annual merger savings for 2019, which equates to an incremental $80 million above the 2018 savings target. Our success in the merger savings front is a testament to our teams' solid execution. For example, we're realizing additional savings in supply chain and support service as we leverage the scale of our larger company.

In the third quarter, we also retired over 7.5 million shares, dollar cost averaging consistent with our plan. As of the end of September, we were roughly 73% complete with the share repurchase program, which we previously established to re-balance the company's capital structure and effectively deploy cash in connection with our merger announcement in July of 2017. Tony will further discuss our latest financial activity including share repurchases.

Before I move on to slide 6, let me update you on a couple of other recent events. First, we spent the summer advertising our new Evergy brand to customers. We officially re-branded our operating utilities in October. It was exciting that the communities we serve now know us all as Evergy. There is an appendix slide that details the name changes for each of our utility subsidiaries.

Lastly, our nuclear facility Wolf Creek is wrapping up its planned refueling outage. From the breaker opened in September, it marked Wolf Creek's second consecutive record breaker run. This is the first time in plant history to have back to back record breaker operating runs. During this most recent stretch, the unit ran for 491 straight days, the third longest cycle since operations began in the mid-1980s. I'm extremely proud of the team and their accomplishments. This is only achieved through a long-term vision that includes a keen focus on human performance and equipment reliability.

Now moving on to slide 6, I'll provide the latest on regulatory and legislative proceedings. In October, the Missouri PSC issued an Accounting Authority Order requiring Evergy Missouri West, previously known as GMO to defer revenues associated with its retired Sibley plant to a regulatory liability. This was contrary to pass regulatory precedent and settled law[Phonetic]. We are extremely disappointed with the outcome of this case. From the beginning, we and the Commission staff opposed AAO request as a cherry picking of our 2018 rate case settlement and undermining the utility framework in Missouri. The Commission has denied our request for rehearing and now we expect to appeal the order. The annual impact of this order will be approximately $9 million or $0.03 a share. However, as I mentioned earlier, we are continuing to execute our plan and we'll work to offset the impacts of the order in the future.

Now moving to Kansas. In September, the KCC denied our request which was supported by KCC staff to place into rates the 8% of Jeffrey Energy Center we negotiated and purchased upon our lease expiration earlier this year. We view this purchase and request as part of wrapping up a long-term position associated with this 8% of the plant, which